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Stockholders Equity | 12 Months Ended
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Dec. 31, 2023
Stockholders Equity |
Stockholders' Equity | Note 12 – Stockholders’ Equity Dividends Declared Dividends declared and paid on Common Stock were $-0- and $1,277,066 for the years ended December 31, 2023 and 2022, respectively. On November 11, 2022, the Company’s Board of Directors determined to suspend regular quarterly dividends. Future dividend policy will be subject to the discretion of the Company’s Board of Directors. 2014 Equity Participation Plan Effective August 12, 2014, the Company adopted the 2014 Equity Participation Plan (the “2014 Plan”) pursuant to which a maximum of 700,000 shares of Common Stock of the Company were initially authorized to be issued pursuant to the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock and stock bonuses. Incentive stock options granted under the 2014 Plan expire no later than ten years from the date of grant (except no later than five years for a grant to a 10% stockholder). Non-statutory stock options granted under the 2014 Plan expire no later than ten years from the date of grant. The Board of Directors or the Compensation Committee determines the vesting provisions for stock awards granted under the 2014 Plan, subject to the provisions of the 2014 Plan. On August 5, 2020, the Company’s stockholders approved amendments to the 2014 Plan, including an increase in the maximum number of shares of Common Stock of the Company that are authorized to be issued pursuant to the 2014 Plan to 1,400,000. On August 9, 2023, the Company’s stockholders approved an amendment to the 2014 Plan to increase the maximum number of shares of Common Stock of the Company that are authorized to be issued pursuant to the 2014 Plan to 1,900,000. The 2014 Plan terminates on August 12, 2024 and no further awards may be granted under the 2014 Plan after such date. As of December 31, 2023, there were 584,596 shares reserved for grants under the 2014 Plan. Stock Options The results of operations for the years ended December 31, 2023 and 2022 include stock-based compensation expense for stock options totaling approximately $-0- and $9,000, respectively. Stock-based compensation expense related to stock options for the year ended December 31, 2022 is net of estimated forfeitures of approximately 18%. Such amounts have been included in the consolidated statements of operations and comprehensive loss within other operating expenses. No options were granted during the years ended December 31, 2023 and 2022. The fair value of stock options at the grant date are estimated using the Black-Scholes option-pricing model. The Black-Scholes option - pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options. A summary of stock option activity under the Company’s 2014 Plan for the year ended December 31, 2023 is as follows:
Stock Options |  | Number of Shares |  |  | Weighted Average Exercise Price per Share |  |  | Weighted Average Remaining Contractual Term |  |  | Aggregate Intrinsic Value |
Outstanding at January 1, 2023 |  |  | 107,201 |  |  | $ | 8.31 |  |  |  | 1.92 |  |  | $ | - |
Granted |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |
Exercised |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |
Expired/Forfeited |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |
Outstanding at December 31, 2023 |  |  | 107,201 |  |  | $ | 8.31 |  |  |  | 0.94 |  |  | $ | - |
Vested and Exercisable at December 31, 2023 |  |  | 107,201 |  |  | $ | 8.31 |  |  |  | 0.94 |  |  | $ | - |
The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2023 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s Common Stock for the options that had exercise prices that were lower than the $2.13 closing price of the Company’s Common Stock on December 31, 2023. No options were exercised, forfeited or expired during the year ended December 31, 2023. The total intrinsic value of options when forfeited are determined as of the date of forfeiture. The total intrinsic value of options when expired are determined as of the date of expiration. Participants in the 2014 Plan may exercise their outstanding vested options, in whole or in part, by having the Company reduce the number of shares otherwise issuable by a number of shares having a fair market value equal to the exercise price of the option being exercised, or by exchanging a number of shares owned for a period of greater than one year having a fair market value equal to the exercise price of the option being exercised. As of December 31, 2023, there were no unvested options. Restricted Stock Awards A summary of the restricted Common Stock activity under the Company’s 2014 Plan for the year ended December 31, 2023 is as follows:
Restricted Stock Awards |  | Shares |  |  | Weighted Average Grant Date Fair Value per Share |  |  | Aggregate Fair Value |
Balance at January 1, 2023 |  |  | 366,597 |  |  | $ | 6.97 |  |  | $ | 2,555,181 |
Granted |  |  | 280,669 |  |  | $ | 1.42 |  |  | $ | 398,338 |
Vested |  |  | (82,865 | ) |  | $ | 3.84 |  |  | $ | (318,202 | )
Forfeited |  |  | (13,820 | ) |  | $ | 4.17 |  |  | $ | (57,686 | )
Balance at December 31, 2023 |  |  | 550,581 |  |  | $ | 3.82 |  |  | $ | 2,103,219 |
Fair value was calculated using the closing price of the Company’s Common Stock on the grant date. For the years ended December 31, 2023 and 2022, stock-based compensation for these grants was approximately $833,000 and $1,369,000, respectively, which is included in other operating expenses on the accompanying consolidated statements of operations and comprehensive loss. These amounts reflect the Company’s accounting expense and do not correspond to the actual value that will be recognized by the directors, executives and employees. Employee Stock Purchase Plan On June 19, 2021, the Company’s Board of Directors adopted the Kingstone Companies, Inc. Employee Stock Purchase Plan (the “ESPP”), subject to stockholder approval. Such approval was obtained on August 10, 2021. The purpose of the ESPP is to provide eligible employees of the Company with an opportunity to use payroll deductions to purchase shares of Common Stock of the Company. The maximum number of shares of Common Stock that may be purchased under the ESPP is 750,000, subject to adjustment as provided for in the ESPP. The ESPP was effective August 10, 2021 and expires on August 10, 2031. A maximum of 5,000 shares of Common Stock may be purchased by an employee during any offering period. The initial offering period under the ESPP was from November 1, 2021 through October 31, 2022 (“2021/2022 Offering”). There is currently no offering pursuant to the ESPP subsequent to October 31, 2022. For the years ended December 31, 2023 and 2022, stock-based compensation under the 2021/2022 Offering was approximately $-0- and $15,000, respectively, which is included in other operating expenses on the accompanying consolidated statements of operations and comprehensive loss. At the end of the 2021/2022 Offering period, 33,222 shares of Common Stock were issued at $1.82 per share to participating employees for a total purchase price of $60,464. Warrants In connection with the Exchange Agreement (see Note 9 – Debt – “Note and Warrant Exchange”), as additional consideration, on December 15, 2022, the Company issued warrants to the Exchanging Noteholders to purchase 969,525 shares of Common Stock. The fair value of the warrants, using the Black-Scholes valuation formula, was $993,200, which has been capitalized as a deferred financing cost of the 2022 Notes. The fair value of the warrants is being amortized over the life of the warrants, which is 36.5 months. The warrants are exercisable through December 30, 2025 at an exercise price of $1.00 per share. Holders of the warrants may exercise their outstanding warrants in cash, or, in whole or in part, by having the Company reduce the number of shares otherwise issuable by a number of shares having a fair market value equal to the exercise price of the warrants being exercised. As of December 31, 2023, all warrants for the purchase of an aggregate of 969,525 shares of Common Stock were outstanding. No warrants were granted during the year ended December 31, 2023. The following weighted average assumptions were used for grants during the following periods:
|  | Years ended |
|  | December 31, |
|  | 2023 |  |  | 2022 |
Dividend Yield |  |  | n/a |  |  |  | 0.00% |
Volatility |  |  | n/a |  |  |  | 57.45% |
Risk-Free Interest Rate |  |  | n/a |  |  |  | 4.00% |
Expected Life |  |  | n/a |  |  | 3 years |

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